Chevron Q1 EPS Falls 36% to $1.41 with $2.9B Hedge Loss
Chevron’s Q1 adjusted EPS dropped to $1.41 from $2.18 a year earlier, driven by a $2.9 billion loss on derivative timing effects. The company warned that prolonged Strait of Hormuz closures could extend negative impacts, with oil flow normalization potentially taking 1–2 months.
1. Q1 Earnings Decline
Chevron reported first-quarter adjusted EPS of $1.41, down from $2.18 in Q1 2025, marking a 36% decline in per-share earnings. Revenue trends reflected narrower margins as the company navigated volatile oil prices.
2. Hedge Timing Losses
The company booked $2.9 billion in paper losses on oil price hedges entered earlier in the year when prices were lower. These losses stemmed from marking derivative positions to market value before underlying physical barrels could be delivered.
3. Strait of Hormuz Risks
Chevron cautioned that a continued closure of the Strait of Hormuz could exacerbate supply disruptions worldwide. Management estimates that restoring normal oil flows may take one to two months following any reopening.